“A year ago, this was like science fiction,” said Inon Beracha, (pictured above), chief executive of PrimeSense. “Seeing the response of the consumer to Kinect is overwhelming. I heard a four-year-old was explaining to his father how to use Kinect. It’s so natural.”

PrimeSense designs chips that can capture the movement of people in a 3D space. It processes those images and feeds them to software that translates them into control inputs for game consoles.

PrimeSense’s chips are used in the 3D camera that is the backbone of the Kinect motion-control system, which saw spectacular sales of 8 million units since its debut on Nov. 4. With Kinect, Steve Ballmer, chief executive of Microsoft, bellowed at his keynote speech at the Consumer Electronics Show, “You are the controller.” That means you use your body to control the game. It took a lot of preparation to line up the supply chain for the Kinect launch, Beracha said.

Tel Aviv, Israel-based PrimeSense is now expanding to customers in the TV and PC markets. Asus showed off its Wavi set-top box, which can wirelessly connect to both a TV and a PC. It takes content stored on the PC and displays it on the TV. The PrimeSense chips allow users to surf through the content using their own hand and body gestures.

Asus plans to launch the Wavi in the second quarter. Other companies are also planning to launch PrimeSense-based systems this year, Beracha said. One of the customers is in the IPTV, or internet protocol TV, market.

PrimeSense calls its technology Natural Interaction Technology. It enables 3D mapping of everything in a room and gesture recognition. It can be used in consumer electronics devices such as TVs, game systems, and PCs. It allows people to get rid of their remote controls and use natural motion instead.

The technology isn’t perfect yet. PrimeSense is working on improving the field of view so that devices such as the Kinect can recognize movement in a wider 3D space. The company is also trying to improve the accuracy, or resolution, of the recognition.

Previous to today’s funding, PrimeSense had raised $29.4 million from investors including Gemini Israel Funds, Genesis Partners and Canaan Partners. Rivals include Optrima, a sister company to Softkinetic. Others rumored to be working on technology include Samsung, PMETec, and Mesa Imaging. Check out the video of Beracha using the Asus Wavi below.